SI AnnRev2021 web - Flipbook - Page 24
24 SHARED INTEREST SOCIETY ANNUAL REVIEW 2021
THE FINANCIAL
OVERVIEW
The 2020-21 financial year was again
challenging due to the global Covid-19
pandemic, making it harder to bring new
customers on board and for some existing
customers to trade successfully. There was
also a period of uncertainty around elections
in West Africa. The average exchange rate of
the US Dollar to the Pound Sterling during the
year was 1.37 (last year 1.28). Together, these
factors led to a reduction in our principal
lending income of £209k. After other items,
our total income decreased by £216k. The
net amount lent to customers at the year-end
was close to £32m.
We continued our main banking relationship
with Santander UK plc, providing us with the
ability to borrow foreign currency, notably US
Dollars and Euros, which we need to support
producers and buyers. During the year, we
also successfully repeated the approach of
converting a proportion of our Pound Sterling
capital into these currencies for a fixed period
of time and at an agreed exchange rate. This
helped to manage volatility on the exchange
rate for borrowing currency to carry out
our lending, and reduced borrowing costs
during the year. We also retained an active
PATRICIA
ALEXANDER
RICHARD
ANDERSON
PAUL
CHANDLER
relationship with the Co-operative Bank,
operating an account which is used by
members to pay in their investments.
Operating costs for the Society have
reduced by £158k from the previous year.
The main reasons behind this were the low
amounts of travel, reduced rental costs
and lower marketing costs as we moved a
large proportion of promotion online, all as a
consequence of the pandemic. Profit before
provisions and interest was almost identical
to the previous year.
The bad debt charge for the year remains
high at just over £1m but has reduced from
2020, leaving an overall surplus of £61k
once interest to members is factored in. This
leaves the Society within, but at the lower
end of its targeted range of reserves (more
details are available in the published annual
statutory financial statements). The overall
financial position of the Society nevertheless
remains strong with a record year of growth
in member capital of £4.6m. In addition
to specific provisions against doubtful
accounts, which are cumulatively £10.2m,
we have reserves from this and previous
years’ surpluses, totalling £1.66m.
MARY
COYLE
YVONNE
GALE
MARTIN
KYNDT
TIM
MORGAN
CRISTINA
TALENS